All Forum Posts by: Jeff Rabinowitz

I live just North of Detroit. There are many who do very well investing in the City itself (I invest mainly in the suburbs). If you invest in Detroit you must know the neighborhoods or have someone trustworthy on the ground who does. In terms of geographic area Detroit is one of the largest cities in the Country. If I recall correctly, it is larger than New York, Boston and San Fransisco combined. Some areas are quite nice--some are downright dangerous. The boundaries of these areas are constantly shifting. I live here and don't invest in the City unless I am partnering with someone who knows the City well. There are lots of people who claim to be experts--some of those are scammers. If your Detroit partner lives in San Fransisco you might want to do a bit more due diligence.

At a 50% LTV many private and hard money lenders will be happy to lend on a wide variety of assets with no income documentation.

Welcome. We are quite fortunate in SE Mich. to have quite a few REIAs. Attending is an easy way to meet active investors. If you come willing to share your experiences I think you will be surprised at how readily other investors will share theirs. Real estate is easier and more lucrative as a team activity.

@Account Closed you have recognized an error was made and you are taking steps to correct the error. You have possession of the property. You can do anything you wish. Is moving tenants in the home in compliance with the terms of the loan? No. Would the lender move to foreclose on that loan because of this? Maybe. I suspect the lender would not be anxious to take action in this case (litigation is expensive and you are making payments and working on the problem) but even if they did decide to take action immediately that process takes time. They would first have to declare the loan in default, you would have time to respond, then file a complaint, schedule a court date, properly serve you.....this could take months. Presumably, you will have the first lender cashed out well before they would take action. You have to balance the extra cost of keeping the property vacant (and the greater risk that it will be vandalized when it is vacant) against the probability that the situation will soon be resolved. You assess the various options and your tolerance for risk and make a business decision. Best wishes for a quick resolution.

Have you considered a reverse mortgage? If you are correct on the value of the home she should be able to borrow enough to retire the first mortgage plus get a lump sum or a monthly payment whichever would fit her situation best.

As Ned says, ultimately your investors will want a return on their money but their first concern will be a return of their money. You have to convince your investors that their funds are reasonably safe. Have you built 4-plexes before? Were those projects profitable? Do you have any of your own funds in this deal? Will the investors be on title? Do you have proper insurance? What if you get injured? Will the project proceed? If you can show that your project will be profitable (comps, etc), that you can complete it properly and that you are serious about protecting your investors you will have a much easier time finding money partners.

That is one of the main reasons prohibition ended. The States needed the tax revenue then also. There were other reasons which are similar to the marijuana situation. People were outraged at the violence and corruption associated with illegal alcohol which wasn't there with legal alcohol. (Prohibition was the catalyst for organized crime--it gave the mobsters a reason to work together). Alcohol consumption and underage drinking actually increased under prohibition. (The speak easys were open round the clock and they didn't care how old you were).

$120? That is a huge late fee. I can't imagine any judge near me upholding that. I have had judges cap my late fee at $50-$100 on a rent of ~$1,100. (Most of my leases specify a $50 late fee if rent has not been received by the 5th and then $10 per day thereafter. I sometimes assess $100 but I have only rarely assessed more. If a tenant is late more than 10 days multiple times I move to eviction. Receipt of the eviction paperwork either solves the problem or the eviction does.)

From what I read it seems that the tenant may have actually initiated their payment today but it will not be transferred to your account for 3 days. It may be wise to get a legal ruling on what constitutes payment. I would think if the tenant initiated the transaction on the first that they would be deemed to have paid on the first. It may be similar to a tenant paying with a check. If you receive a check on time but the bank places a hold on the funds hasn't the tenant paid on time even though you have not had access to the funds?

If the tenant actually paid today and you just haven't been notified by your electronic payment system you may be laying the groundwork for a troubled tenancy if you accuse them of being late right off the bat. Asking them if they paid is much gentler than accusing them of not paying if you are not sure what is actually true. You posted early this morning. At my posting there are still 6 1/2 hours left in March 1st.

@Jal Singh there are a lot of REIA groups in your (our) area. If you attend one there is a good chance you will run into a landlord who has extra appliances that you can buy quite inexpensively. I am one of those who rarely provide appliances. It seems when I leave them the tenant has their own and if I don't provide them the tenant wants them. I have absolutely no desire to deal with a request to repair an appliance. If you catch a guy like me between tenants I am likely to give you the appliance for a song. I usually just throw them away rather than pay someone to clean them.

Don't get too far ahead of yourself. Before you plan your third purchase buy your first one. Operate it for a while and see if you even want to be a landlord long term. Maybe put a little more down on your first purchase to improve your cash flow. If the first one works out then start planning the rest of your empire. Best wishes.